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Are You Loyal to Your Loyalty Program?
How many loyalty programs are you a part of? How many compete with each other? I know that I join simply for the perks, not to build actual loyalty. However, the good programs end up strengthening my relationship.
For example, I have a Stop & Shop card and a Shaws card. However, Stop and Shop provides more relevant POS coupons, and they now offer discounted gas based on points. So, I tend to go there more. As a consumer, the experience is improving. But the good news is that the strategy is improving on the business side as well.
Today's issue of 1to1 Weekly highlights research showing that retailers are thinking more strategically about their loyalty programs. Companies aren't just collecting customer data anymore; they are actually using it to calculate lifetime value and other value metrics to improve long-term customer loyalty.
How is your company advancing its loyalty strategy?
addendum to my earlier post:
I neglected to include the store staff in the dynamic and the extent to which they are committed to and understand/support the program
are they integrated into the program
(ie incentives paid via points)
are they enthused about it?
do they chatter about the cool rewards
does HO/marketing/merchandising/store ops solicit their feedback?
If the staff are silent or worse bemoan the program - what signal does that send to the consumer?
Miro
Brand Central Consulting
there are two sides to this question as you noted.
One is from the retailer's perspective
and what they are doing to collect, understand and reconfigure their offering to provide a stronger purchase continuity, purchase depth and purchase profitability
The other side of the equation is the consumer and what they feel about the relationship. Do they see themselves as purchasers, customers or partners in the relationship?
To the extent the business has been able to move people along the purchaser-partner continuum, the more their continuity program will fullfill the affinity side of the dynamic.
The less successful will have data-rich coupon/incentive programs that hopefully serve as shopping decision tie-breakers. The data capture gains will be invaluable - as long as one can continue to fund the cost of the program.
So at the end of the day - I think this needs to be viewed from both the behavioral and attitudinal dimensions.
Miro
Brand Central Consulting
Hi Elizabeth
An interesting observation. It raises two further observations...
Firstly, that customers are rarely undividedly loyal to an organisation and its products. Instead, they are promiscuously loyal to a range of organisations and products depending upon the circumstances. For example, I am planning to fly to London for a series of discussions soon. I am promiscuously loyal to Lufthansa because I am part of their FFP scheme. But I am also promiscuously loyal to Germanwings because they fly from my local airport and are a lot cheaper. Germanwings wins out this time, but who knows next time.
Secondly, that my loyalty to a loyalty programme may be just as valuable as my loyalty to the parent organisations offering the programme and its products. Once you start to value customers in a loyalty programme, you can start to value the programme as a whole and look to ways to enhance that value. Or to separate the programme from the parent company if it makes financial sense to do so. For example, when Air Canada’s FFP Aeroplan was spun out of Air Canada a few years back, its value was significantly more than that of the rump airline that remained.
Food for thought.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Good heavens no! There is never enough incentive to remain loyal!
I buy what I want where I can get it for the best deal